Rising Energy Prices and What to do Next: How Incentives can Insulate Your Business
The energy-related headlines have painted a dire picture for this winter when it comes to power bills. Uncertain supplies of fuel across the world, colder-than-usual weather, and rising energy prices are combining to give many customers an inevitable sticker shock when the utility bills come.
However, while rising energy prices are inevitable, high bills are not. Now is the optimal time for businesses to take action to insulate themselves before it is too late. From energy storage to energy efficiency to demand response programs, various options exist that can provide both near-term relief and long-term energy benefits.
Understanding these programs and opportunities is an important way to make the most strategic choices for your business.
Way to Lower a Corporate Energy Bill Today
For those who may not have been paying attention, the utility sector today looks vastly different than it used to. Gone are the days when utility customers receive a bill once per month and otherwise never interact with, or even really consider, their power provider, save for the occasional outage. Today, customers are becoming much more engaged with their utilities and power supply. Customers, especially energy-intensive businesses, may want to connect with utilities to determine if any utility program offerings that would be beneficial. However, there are many more ways to lower energy costs that go beyond utility offerings.
In addition, the biggest news of the year as it pertains to energy, was the passage of the $369 billion Inflation Reduction Act (IRA) is the largest and most ambitious investment in climate action that the federal government has ever made. It delivers a sea change for the energy storage sector because it provides an investment tax credit that covers 30% or more of the investment—for the first time—to what is known as “standalone” energy storage.
There are more incentives than ever for energy-intensive businesses to lower costs at the utility, state, and federal levels. The right partner can help you vet—or stack—these options and incentives to insulate your business against rising energy costs.
Ask About Incentives for Energy Storage: Businesses that procure a behind-the-meter battery energy storage system (BESS) can insulate themselves against energy price volatility. Companies like Convergent Energy and Power (Convergent) take the hassle of industrial-scale energy storage. Convergent owns and operates battery storage on behalf of businesses, charging the batteries when energy is cheap and readily available and then discharging that energy to it to customers when energy costs are at a premium. Because battery storage helps reduce businesses’ energy usage when it is in greatest demand, some utilities offer financial incentives to their customers to deploy battery storage at strategic times. In particular, battery storage offers a way to participate in demand response programs without a change to operations.
Explore Curtailment, Which Incentivizes Consumption Flexibility: Utilities can work with businesses on unique ways to save on power bills if they can be flexible on when they consume energy. If a customer, whether a business or a home, can reduce their power consumption during regular times of peak demand or respond to real-time requests from the utility to reduce energy use, many utilities offer incentives for doing so. Further, engaging with the utility on time-of-use rates, where the cost of electricity varies depending on expected demand, can offer customers ways to optimize their power consumption to benefit the utility and ultimately pay lower bills for doing so. The challenge for businesses, however, is that many commercial and industrial facilities have 24/7 operations—or the cost of shutting down production can be too steep to make these financial incentives worthwhile.
Ask About Local or State Programs to Incentivize the Clean Energy Transition
In addition to utility-level incentives, certain states also provide incentives for energy storage, solar, and using more renewable energy. A partner like Convergent can help you determine which incentives are available in your area.
Our market experts can help identify potential energy-related government programs for which businesses may qualify. Some of the most effective programs have been in the states and regions where energy has been most expensive, including California, New England, New York, and Puerto Rico.
Some jurisdictions also provide energy audits, weatherization upgrades, or energy-efficient equipment incentives. The right partner can help businesses learn all the incentives that they may qualify for and how to stack them, when applicable.
Knowledge is Power When Exploring Ways to Reduce Your Energy Bill
The more businesses know about the utility, state, and federal incentives, the easier it is to take advantage of them. Mid-term, the best way to reduce costs is to install an energy storage or solar-plus-storage solution that reduces dependence on the grid when power is most expensive or unavailable. In the short term, it is helpful to understand what utilities may be doing to bring prices down or if curtailment is an option.
Which Incentives Will Help Your Business Lower Your Energy Bill?
The bad news: energy price increases are not going away. The good news: numerous programs that are already available at the utility, state, and federal levels. The best thing businesses can do is learn what these programs are—and if they qualify. Often, energy managers are the best suited to make these assessments.
Energy savings are more critical than ever to businesses facing rising prices, tight margins, competition, and supply chain issues. Plus, a majority of businesses are looking for smarter, greener, and cheaper electricity, especially this time of year. With energy or solar-plus storage, it’s possible to have all three of these benefits simultaneously.
Convergent has saved businesses up to 40% off their electricity bills. With over $500M invested in projects in operation or allocated to projects under development, Convergent is a leading independent owner and operator of energy storage and solar-plus-storage solutions.
We are happy to work with your team to determine which incentives are right for you—whether or not you choose to pursue a battery storage system. We’re here to help energy managers and energy-intensive businesses determine if energy storage or solar-plus-storage is right for your needs—and which incentives will deliver the greatest return on our investment.
We love saving businesses money on their energy bills so reach out to us for a customized consultation on your energy costs and ways to save.